Towards a low emissions future

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The Government's critics never concede that Australia is on track to meet its Kyoto duties, writes John Howard.

Australia has a choice to make to secure its energy future. But critics of the Government's energy white paper are wrong to argue it comes down to choosing between traditional energy supplies such as coal, gas and oil and renewable energy sources including wind and solar power.

Australia is well positioned to deliver a mix of traditional and renewable energy sources to meet our growing demand for energy. The choice we face, however, is between low and high emissions outcomes.

We need to be realistic and practical when it comes to our present and future energy needs. Coal, oil and gas will meet the bulk of Australia's energy demand for the foreseeable future. These are industries that support hundreds of thousands of jobs in Australia and that earn more than $24 billion a year in export income.

Our new energy policy is about making Australia a world leader in the development of low emissions technologies without throwing away a natural resources advantage that gives us access to low-cost energy.

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A number of critics argue that the Government should have mandated a higher target for renewable energy sources. This would impose unacceptable costs on the Australian economy and benefit too few technologies.

Our future prosperity as a nation depends on being able to retain and develop our natural energy advantage in traditional industries, including by making them cleaner. Our environmental challenge is to meet the growing demand for energy while also moving to a low emissions future.

Simply increasing the mandatory renewable energy target is not the answer, because it would raise costs by billions of dollars and put government in the business of favouring certain technologies over others.

A better and smarter way is to directly fund all technologies that lower Australia's future emissions. This is what the Government is doing with a $500 million Low Emissions Technology Fund. This in turn will leverage a further $1 billion in private sector investment to develop and demonstrate low emission technologies.

Renewable energy sources will, of course, be eligible for the Low Emissions Fund. In addition, the Government is providing more than $200 million specifically for renewable energy technologies to prepare Australia to respond to potential long-term emissions constraints.

This includes $75 million for Solar Cities trials to test a visionary new energy scenario - where solar power, energy efficiency and market reforms combine to provide a sustainable energy future. This is about doing things smarter with solar panels, better insulation, energy efficient appliances and smart meters that allow households to sell excess electricity back into the grid at peak times.

We are also requiring about 250 large firms to undertake mandatory energy efficiency audits and to report publicly every five years.

The other main criticism we face is over our decision not to sign the Kyoto Protocol. The simple fact is that Kyoto is no silver bullet when it comes to climate change and its current provisions impose unfair costs on Australia.

What the Government's critics never concede is that Australia is one of the few nations on track to meet our obligations under Kyoto. As well as the measures announced on Tuesday, the Government is already spending a further $1 billion on a range of greenhouse abatement measures.

But it makes no sense for Australia to ratify something that does not encompass many of the world's largest emitters, including the US and China.

Critically, the Kyoto Protocol does not address the issue of investment and emissions moving from one nation to another with no overall greenhouse benefit. To give an example, Australia is in a strong position to meet Asia's burgeoning LNG demand. But we face stiff competition from a number of countries such as Indonesia that have gas resources with high levels of carbon dioxide but do not have Kyoto obligations.

If Australia is forced to impose a discriminatory impost on carbon emissions, it is likely that new LNG investments will go elsewhere. The global environment would be no better - indeed it would be worse - and Australia will have lost out.

The Australian Government is looking beyond the Kyoto Protocol towards a more effective long-term response to climate change. We accept that substantial further effort is needed to prepare the economy for future emission constraints.

This is delivered in our energy white paper. In supporting all low-emission technologies, it is looking to a post-Kyoto future.